- This topic has 3 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
Hello John
Hope you are well.
This is an extract from a questionWiring – in an ideal situation 25 cm of wiring is needed for each completed radio.
Co estimates that 4% of the purchased wire is lost in the assembly process. Wire costs $4.80 per metre to buy.Labour – It takes 30 minutes to assemble a unit and the assembly workers are paid $12.60 per hour. It is estimated that 10% of hours paid to the assembly workers is for idle time.
Calculate the reduction in cost that would be achieved by eliminating the labour idle time and the wire lost in the assembly process
It seems very complicated to me ..
The answer saysCost of labour idle time = (30/60) × $12.60 × (10/90) = $0.70
Cost of material waste = (25/100) × $4.80 × (4/96) = $0.05
Total cost reduction = $0.70 + $0.05 = $0.75What i don’t understand is why they multiplies 10/90 , if they want to calculate whats the cost of idle time shouldn’t it be 10/100 ?
For every 100 hours of labour that we pay for, 10 hours (10%) will be idle and only 90 hours will be worked.
Putting it the other way round, for every 90 hours of work we need to pay for 100 hours.
Here it takes 30/60 hours of work and therefore at the moment they are needing to pay for 100/90 x 30/60 hours of which 10/90 hours are idle.
So if they were able to eliminate the idle time then they would be saving those 10 hours and would be saving 10/90 x 30/60 hours (at $12.60 per hour).
i dont understand this “they are needing to pay for 100/90 x 30/60 hours of which 10/90 hours are idle.”
how is it 10/90
if we pay for 100/90 then idle time is for every 100 we pay 10 hours so 10/100 right ?
- You must be logged in to reply to this topic.